Failed IPOs of the Dot-Com Bubble

The escalating price of buyouts and the valuations of recent IPOs have plenty of people worried we’re in — or approaching — another tech bubble. Experts are divided on how accurate those fears are, but there’s no denying the implosion that occurred around the turn of the century.

The first tech bubble saw ridiculous levels of spending — from both executives and venture capitalists — and it was only a matter of time before investors hopped on that bandwagon.

A lot of those shareholders ended up losing their shirts when the bubble burst, though many would confess that the investment decisions they made at the time were hardly prudent. Here are some of the most infamous flops of the era.

Pets.com: It's impossible to think of the first Internet era without thinking of the Pets.com sock puppet. He was everywhere and was nearly as well-known as the Geico gecko is today.
That familiarity, in part, persuaded many investors to lay down money in the company's February 2000 IPO (which was backed by Amazon.com). Pets.com raised $82.5 million – but nine months later it folded, due to major recurring losses. Part of the reason for that was aggressive advertising, but the company also lost money on virtually every item it sold. In the third quarter of 2000, Pets.com reported negative gross margins of $277,000. (The second quarter had seen a $1.7 million margin loss.) That same quarter (its last full quarter as an operating entity), the company lost $21.7 million on $9.4 million in revenue.
As for the puppet, he went on to shill for BarNone, which helps people with bad credit histories get car loans. He's still there today, front and center on that website.

Image 1 of 6 - Failed IPOs of the Dot-Com Bubble

Pets.com: It's impossible to think of the first Internet era without thinking of the Pets.com sock puppet. He was everywhere and was nearly as well-known as the Geico gecko is today.
That familiarity, in part, persuaded many investors to lay down money in the company's February 2000 IPO (which was backed by Amazon.com). Pets.com raised $82.5 million – but nine months later it folded, due to major recurring losses. Part of the reason for that was aggressive advertising, but the company also lost money on virtually every item it sold. In the third quarter of 2000, Pets.com reported negative gross margins of $277,000. (The second quarter had seen a $1.7 million margin loss.) That same quarter (its last full quarter as an operating entity), the company lost $21.7 million on $9.4 million in revenue.
As for the puppet, he went on to shill for BarNone, which helps people with bad credit histories get car loans. He's still there today, front and center on that website.

Pets.com: It's impossible to think of the first Internet era without...thinking of the Pets.com sock puppet. He was everywhere and was nearly...as well-known as the Geico gecko is today.
That familiarity, in...part, persuaded many investors to lay down money in the company's...February 2000 IPO (which was backed by Amazon.com). Pets.com raised...$82.5 million – but nine months later it folded, due to major...recurring losses. Part of the reason for that was aggressive...advertising, but the company also lost money on virtually every item...it sold. In the third quarter of 2000, Pets.com reported negative...gross margins of $277,000. (The second quarter had seen a $1.7 million...margin loss.) That same quarter (its last full quarter as an operating...entity), the company lost $21.7 million on $9.4 million in revenue....
As for the puppet, he went on to shill for BarNone, which helps...people with bad credit histories get car loans. He's still there...today, front and center on that website.

Image 2 of 6|Failed IPOs of the Dot-Com Bubble

Webvan: The grocery delivery service had a good idea, and expanded rapidly, growing to eight cities in 18 months — and it had plans to expand to 26 more between mid-1999 and 2001. It also placed a $1 billion order for planned warehouses in the months leading up to its IPO.
That confidence pumped up investors — and the company raised $375 million in its 1999 IPO. Shares ultimately hit $30, but the company couldn't attract customers at the necessary pace. Combined with the thin margins of the grocery business, it ultimately fell to 6 cents per share. Webvan called it quits in 2001.

Image 2 of 6 - Failed IPOs of the Dot-Com Bubble

Webvan: The grocery delivery service had a good idea, and expanded rapidly, growing to eight cities in 18 months — and it had plans to expand to 26 more between mid-1999 and 2001. It also placed a $1 billion order for planned warehouses in the months leading up to its IPO.
That confidence pumped up investors — and the company raised $375 million in its 1999 IPO. Shares ultimately hit $30, but the company couldn't attract customers at the necessary pace. Combined with the thin margins of the grocery business, it ultimately fell to 6 cents per share. Webvan called it quits in 2001.

Webvan: The grocery delivery service had a good idea, and expanded...rapidly, growing to eight cities in 18 months — and it had plans to...expand to 26 more between mid-1999 and 2001. It also placed a $1...billion order for planned warehouses in the months leading up to its...IPO.
That confidence pumped up investors — and the company...raised $375 million in its 1999 IPO. Shares ultimately hit $30, but...the company couldn't attract customers at the necessary pace. Combined...with the thin margins of the grocery business, it ultimately fell to 6...cents per share. Webvan called it quits in 2001.

Image 3 of 6|Failed IPOs of the Dot-Com Bubble

Kozmo: There are still people in metropolitan areas who miss this delivery service, which delivered anything from movies to snacks in under an hour — with no minimum purchase and no tipping allowed. Private investors kicked in $280 million to help it grow, no doubt looking forward to recouping that in the IPO, which was filed in March 2000.
By that time, though, the dot-com world was imploding, and the company, which was also being dogged by allegations of "cyber redlining" in its delivery areas (avoiding many neighborhoods with high concentrations of black residents — a practice the company denied), shelved its IPO plans. By April 2001, it called it quits.

Image 3 of 6 - Failed IPOs of the Dot-Com Bubble

Kozmo: There are still people in metropolitan areas who miss this delivery service, which delivered anything from movies to snacks in under an hour — with no minimum purchase and no tipping allowed. Private investors kicked in $280 million to help it grow, no doubt looking forward to recouping that in the IPO, which was filed in March 2000.
By that time, though, the dot-com world was imploding, and the company, which was also being dogged by allegations of "cyber redlining" in its delivery areas (avoiding many neighborhoods with high concentrations of black residents — a practice the company denied), shelved its IPO plans. By April 2001, it called it quits.

Kozmo: There are still people in metropolitan areas who miss this...delivery service, which delivered anything from movies to snacks in...under an hour — with no minimum purchase and no tipping allowed....Private investors kicked in $280 million to help it grow, no doubt...looking forward to recouping that in the IPO, which was filed in March...2000.
By that time, though, the dot-com world was imploding, and...the company, which was also being dogged by allegations of "cyber...redlining" in its delivery areas (avoiding many neighborhoods with...high concentrations of black residents — a practice the company...denied), shelved its IPO plans. By April 2001, it called it quits.

Image 4 of 6|Failed IPOs of the Dot-Com Bubble

Drkoop.com: The former U.S. surgeon general who rose to fame during the Reagan administration leveraged his name to form one of the first health information websites. It was a traffic hit, too, boasting 1.4 million unique visitors in May1999, so when it raised $88.5 million from its IPO in June 1999, no one was surprised.
Within a month, shares were at $45.75 and a strategic partnership was in place with AOL. (drkoop.com agreed to pay AOL $89 million over four years to make it the top healthcare content provider across the AOL sites.) But the collapse of the tech bubble — as well as the loss of millions of dollars per quarter in an effort to acquire readers — scared investors. (In March 2000, the company had cash expenses of $8 million.)
In October 2000, the company secured what appeared to be a life-saving $20 million investment, but was forced to liquidate in December 2001 after burning through that money.

Image 4 of 6 - Failed IPOs of the Dot-Com Bubble

Drkoop.com: The former U.S. surgeon general who rose to fame during the Reagan administration leveraged his name to form one of the first health information websites. It was a traffic hit, too, boasting 1.4 million unique visitors in May1999, so when it raised $88.5 million from its IPO in June 1999, no one was surprised.
Within a month, shares were at $45.75 and a strategic partnership was in place with AOL. (drkoop.com agreed to pay AOL $89 million over four years to make it the top healthcare content provider across the AOL sites.) But the collapse of the tech bubble — as well as the loss of millions of dollars per quarter in an effort to acquire readers — scared investors. (In March 2000, the company had cash expenses of $8 million.)
In October 2000, the company secured what appeared to be a life-saving $20 million investment, but was forced to liquidate in December 2001 after burning through that money.

Drkoop.com: The former U.S. surgeon general who rose to fame during...the Reagan administration leveraged his name to form one of the first...health information websites. It was a traffic hit, too, boasting 1.4...million unique visitors in May1999, so when it raised $88.5 million...from its IPO in June 1999, no one was surprised.
Within a month,...shares were at $45.75 and a strategic partnership was in place with...AOL. (drkoop.com agreed to pay AOL $89 million over four years to make...it the top healthcare content provider across the AOL sites.) But the...collapse of the tech bubble — as well as the loss of millions of...dollars per quarter in an effort to acquire readers — scared...investors. (In March 2000, the company had cash expenses of $8...million.)
In October 2000, the company secured what appeared to be...a life-saving $20 million investment, but was forced to liquidate in...December 2001 after burning through that money.

Image 5 of 6|Failed IPOs of the Dot-Com Bubble

FreeInternet.com: The early dial-up days of the Internet were ruled by companies that charged a monthly fee to connect to the web. FreeInternet.com was part of the movement to change that paradigm and was famous for its commercials featuring the talking infant "Baby Bob."
It grew to be the fifth-largest Internet service provider in the country — and planned to go public, but lavish spending led to a bankruptcy in 2000, canceling the planned IPO before it could happen.
As for Baby Bob, he went on to get his own TV show on CBS, which lasted two seasons. Later, like the Pets.com sock puppet, he surfaced with another brand — this time Quiznos.

Image 5 of 6 - Failed IPOs of the Dot-Com Bubble

FreeInternet.com: The early dial-up days of the Internet were ruled by companies that charged a monthly fee to connect to the web. FreeInternet.com was part of the movement to change that paradigm and was famous for its commercials featuring the talking infant "Baby Bob."
It grew to be the fifth-largest Internet service provider in the country — and planned to go public, but lavish spending led to a bankruptcy in 2000, canceling the planned IPO before it could happen.
As for Baby Bob, he went on to get his own TV show on CBS, which lasted two seasons. Later, like the Pets.com sock puppet, he surfaced with another brand — this time Quiznos.

FreeInternet.com: The early dial-up days of the Internet were ruled by...companies that charged a monthly fee to connect to the web....FreeInternet.com was part of the movement to change that paradigm and...was famous for its commercials featuring the talking infant "Baby...Bob."
It grew to be the fifth-largest Internet service provider in...the country — and planned to go public, but lavish spending led to a...bankruptcy in 2000, canceling the planned IPO before it could happen....
As for Baby Bob, he went on to get his own TV show on CBS, which...lasted two seasons. Later, like the Pets.com sock puppet, he surfaced...with another brand — this time Quiznos.